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Fraud*According to the Collins English Dictionary 10th Edition fraud can be defined as: "deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage".[1] In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g. in science, to gain prestige rather than immediate monetary gain*As defined in Wikipedia

Tuesday, September 10, 2013

Bill Black: Not with a Bang but a Whimper--the SEC Enforcement Team's Propaganda CampaignBy Bill Black - Naked Capitalism. . . .“Justice” became an oxymoron in the Bush and Obama administration. It
now means that the elite frauds that became wealthy through their
crimes that drove our financial crisis should enjoy de facto immunity
from prosecution. The NYT, however, pictures the SEC as an
ultra-aggressive enforcer that virtually never fails to take on the
elite CEOs leading the control frauds. The entire piece is one extended
leak by the SEC’s enforcement leadership which has been severely
criticized for its failure to recover the fraudulent profits that elite
Wall Street bankers obtained by running the control frauds. The puff piece, with no critical examination, presents these key statements.

The S.E.C. … has brought civil cases against 66 senior
officers in cases linked to the financial crisis. The agency also
extracted nine-figure settlements from banks like Goldman Sachs.
According to new research by Stanford University’s Securities Litigation
Analytics, the S.E.C. has declined to charge individual employees in
only 7 percent of its securities fraud cases.

My article is the first installment of a three-part series of
articles correcting the NYT propaganda. This installment deals with
these three sentences quoted above. Someone carefully constructed them
to maximize the misleading nature of the statements. The “66 senior
officers in cases linked to the financial crisis” is a phantom number
without a source or useful definitions that falls apart as soon one
looks at the SEC’s claims.

Here
is the SEC source for the claim (note that it is posted on the SEC’s
home page as part of the propaganda campaign that enlisted the NYT
reporters’ aid).

How many C-suite officers of Wall Street firms were individually sued
by the SEC? The SEC says it took action against the following elite
financial institutions:

Bank of America: No officers sued

Bear Stearns: No senior officers sued

Citigroup: No officers sued

Countrywide: CEO sued, settled for “record $22.5 million penalty and
permanent officer and director bar. (10/15/10)” [WKB: most, perhaps all,
of the penalty was paid by Countrywide’s acquirer and insurer.
According to the SEC’s complaint, the penalty represents a small
percentage of the CEO’s fraudulent gains. The CEO was already retired by
the time the SEC sued.]

“Credit Suisse bankers – SEC charged four former veteran investment
bankers and traders for their roles in fraudulently overstating
subprime bond prices in a complex scheme driven in part by their desire
for lavish year-end bonuses. (2/1/12)” [WKB: None of the officers sued
was close to being C-suite level.]

Fannie Mae and Freddie Mac: “SEC charged six former top executives of Fannie Mae and Freddie Mac with securities fraud for misleading investors about the extent of each company’s holdings of higher-risk mortgage loans, including subprime loans” [WKB: all six executives are C-suite or very senior.]

Goldman Sachs: No senior officers sued

IndyMac: “SEC charged three executives with misleading investors
about the mortgage lender’s deteriorating financial condition. (2/11/11)
– IndyMac’s former CEO and chairman of the board Michael
Perry agreed to pay an $80,000 penalty.” [WKB: The penalty figure is
not a misprint. IndyMac made hundreds of thousands of fraudulent
“liar’s” loans and sold them to the secondary market through fraudulent
“reps and warranties.” It was the largest “vector” spreading mortgage
fraud through the system. The three executives sued were C-suite level.]

And then there are the times when the ideological lines get a little blurry, if they weren’t blurry enough already. Former RNC chair Michael Steele and Fox News liberal Lanny Davis are cable news fixtures — and business partners. Steele’s tenure at the RNC was marked by gaffes and scandal (Washington Post, 4/7/10), while Davis’ history has included working on behalf of the dictators of Equatorial Guinea and Ivory Coast (Salon, 12/21/10).

In June 2012, they founded the bipartisan-themed Purple Nation Solutions, a communications firm that specializes in “solutions through legal means, political lobbying and media management” for “CEOs, Fortune 500 companies, political leaders, lobbyists and individuals facing a crisis.”

In fact, it’s difficult to catalog all of the possible conflicts of interest among elite TV pundits. Former Pennsylvania Gov. Ed Rendell plays a TV liberal on MSBNC — but he’s also an adviser at investment bank Greenhill & Co, as well as an operating partner at a small firm that makes investments in the energy industry.

Another TV liberal, Harold Ford, who makes frequent appearances on NBC and MSNBC, also has a day job: He works as a senior managing director for the investment giant Morgan Stanley. Columnist Glenn Greenwald (Salon, 7/9/12) called Ford “the walking, breathing embodiment of virtually everything rotted and corrupt about the American political class”—in other words, a ubiquitous TV pundit.Once upon a time, such conflicts were considered ethically questionable—once they were exposed by other journalists.

The American economy today is a house of cards, wherein each added layer of cards at the top increases the pressure on the lower tiers and threatens the stability of the entire structure. The higher the edifice goes, in fact, the more likely it becomes that the whole thing will come crumbling down at some point.

The reason for this is not the expansion of our economy itself but the inequality, exploitation, corruption, and injustice that are accompanying this expansion at every step. The economy may be growing, but it is doing so at the expense of its foundation — the working class Americans who make all economic activity possible.

I got a lot of letters from folks this week about an online column for Forbes written by a self-proclaimed Ayn Rand devotee named Harry Binswanger (if that's a nom de plume, it's not bad, although I might have gone for "Harry Kingbanger" or "Harry Wandwanker"). The piece had the entertainingly provocative title, "Give Back? Yes, It's Time for the 99% to Give Back to the 1%" and contained a number of innovatively slavish proposals to aid the beleaguered and misunderstood rich, including a not-kidding-at-all plan to exempt anyone who makes over a million dollars from income taxes.

This article is so ridiculous that normally it would be beneath commentary, but there's a passage in there I just couldn't let go:

Imagine the effect on our culture, particularly on the young, if the kind of fame and adulation bathing Lady Gaga attached to the more notable achievements of say, Warren Buffett. Or if the moral praise showered on Mother Teresa went to someone like Lloyd Blankfein, who, in guiding Goldman Sachs toward billions in profits, has done infinitely more for mankind. (Since profit is the market value of the product minus the market value of factors used, profit represents the value created.)

Instead, we live in a culture where Goldman Sachs is smeared as "a great vampire squid wrapped around the face of humanity. . ."

What a world we live in, where Mother Teresa wins more moral praise than Lloyd Blankfein! Who can bear living in a society where such a thing is possible? Quel horreur!

It reads like an Onion piece, just hilarious stuff. I mean, Jesus, even Lloyd Blankfein himself didn't go so far as to take the "God's work" thing 100% seriously, and here's this jackass saying, without irony, that the Goldman CEO literally out-God-slaps Mother Teresa.

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Famous Quotes

The men the American people admire most extravagantly are the greatest liars; the men they detest most violently are those who try to tell them the truth. … H.L. Mencken

An age is called Dark not because the light fails to shine, but because people refuse to see it…James Albert Michener, novelist (1907-1997)

It is impossible to calculate the moral mischief, if I may so express it, that mental lying has produced in society. When a man has so far corrupted and prostituted the chastity of his mind as to subscribe his professional belief to things he does not believe he has prepared himself for the commission of every other crime. … Thomas Paine 1737-1809, Anglo-American Political Theorist, Writer

Laws just or unjust may govern mens actions. Tyrannies may restrain or regulate their words. The machinery of propaganda may pack their minds with falsehood and deny them truth for many generations of time. But the soul of man thus held in trance or frozen in a long night can be awakened by a spark coming from God knows where and in a moment the whole structure of lies and oppression is on trial for its life.: Sir Winston ChurchillWhen governments fear the people, there is liberty. When the people fear the government, there is tyranny. - Thomas Jefferson

When cheaters prosper, we end up with the worst possible system and to call it a free market system is an obscenity. -William BlackWhen the people fear their government, there is tyranny; when the government fears the people, there is liberty." - Thomas JeffersonI believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property - until their children wake-up homeless on the continent their fathers conquered. Thomas Jefferson - 1802

Don't be afraid to see what you see.

..................................... Ronald Reagan

When the people and the government fear Banksters like Goldman Sachs and JP Morgan, there is economic dictatorship that will destroy the very fabric of our existence as a civilized society.Mike Morgan

Let me control the money of a nation and I care not who makes its laws.Meyer Amsheil Rothschild

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